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Retail Suppliers Urge PSC To Develop Alternative To Shocking 15% POR Discount For Residential Customers That Renders Retail Contracts "Uneconomic"
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The nearly 15% purchase of receivables discount rate which resulted from the tariffed calculation for residential customers at Pepco in the District of Columbia would render current retail supplier contracts "uneconomic" and would "crush" the competitive market, NRG Energy, Inc. and Constellation NewEnergy, Inc. said in comments to the D.C. PSC
The nearly 15% discount rate -- specifically 14.8693% -- had been first reported by EnergyChoiceMatters.com on May 1, and arises from the standard annual update methodology for the POR discounts
The current residential POR discount at Pepco-DC is 3.9807%
NRG and Constellation said of the new 14.8693% discount, which still requires approval from the PSC before it becomes effective: "A rate that high will make it impossible for suppliers to make competitive offers to residential customers in the future. It will also wreak havoc on existing contracts."
"Existing retail contracts were most likely priced pursuant to the existing 3.9807% discount rate or the 2022-23 discount rate of 0.00%. There is no question that an increase that big renders existing contract uneconomic," NRG and Constellation said
The retail suppliers urged the PSC to initiate further discussion and cooperation on the POR discount, including directing Pepco to file alternative proposals
"The goal should be to arrive upon a discount rate that will allow Pepco to recover its costs over time but that will not crush the competitive market, harming customers and suppliers," the retail suppliers said
The suppliers cited the use of alternative methodologies by Pepco's affiliate, Delmarva, in Maryland, with such methodologies having employed a different amortization period, or a different time period for the calculation of uncollectibles, versus what the tariff may have called for.
Docket PEPPOR-2024-01
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June 18, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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